The International Chamber of Shipping Urges IMO to Clarify Net-Zero Framework

The International Chamber of Shipping (ICS), a trade association representing over 80% of the world merchant fleet, has called on the UN maritime regulator International Maritime Organization (IMO) to address uncertainties surrounding the new Net-Zero Framework (NZF).

In April, IMO member states made history by endorsing the Net-Zero Framework, a groundbreaking global emissions pricing mechanism for the entire shipping industry. This move, aimed at decarbonizing international shipping, has received full support from ICS, which has long advocated for such measures.

Despite the overall support, shipowners, particularly smaller to medium-sized companies, are apprehensive about the potential complexities and compliance costs associated with the new regulations.

While the focus has primarily been on penalties for emissions (‘the sticks’), clear incentives (‘the carrots’) for cleaner fuels are equally essential. These incentives are crucial to incentivize fuel producers to develop and supply the necessary fuels and infrastructure to help the shipping industry achieve its emission reduction targets, as highlighted by ICS.

Governments must establish unambiguous standards for cleaner fuels promptly. This will provide confidence to fuel producers to invest in green fuel infrastructure, facilitating the industry’s transition to meet the set targets, emphasized ICS.

Expected to be finalized in October, the IMO is set to adopt these measures and provide detailed insights into how these incentives will operate. Certainty on these matters is crucial for shipowners and energy producers to make informed investments in cleaner technologies.

“The IMO must officially adopt the Net Zero Framework in October to send a clear message to the industry and create the necessary incentives for the production of cleaner fuels. Industry stakeholders require clarity, simplicity, and detailed information on the rewards,” stated Thomas A. Kazakos, ICS Secretary General.

“We also urge entities with unilateral and regional schemes, such as the EU ETS, to align with a single clear and transparent system under the IMO. This alignment is critical for meeting the established timelines,” he added.

ICS has submitted proposals to the IMO to help elucidate these issues, including a plea to substitute the term ‘may’ with ‘shall’ to convey a clearer signal to the market.

Additionally, ICS has responded to the EU Commission’s consultation, advocating for the replacement of the EU ETS with the IMO NZF once it is officially adopted. The organization emphasized that the EU should strive to prevent any additional financial or administrative burdens on maritime operators following the anticipated adoption of the IMO NZF.

“Clear and straightforward rules are imperative for the shipping industry to transition effectively and swiftly towards net zero emissions,” concluded the association.